CFA Society Singapore
SINGAPORE (Nov 13): China Sunsine Chemical Holdings, the producer of speciality rubber chemicals and rubber accelerators, reported a 7% rise in 3Q earnings to RMB77.6 million ($15.9 million) from a year ago.
Group revenue rose 16% to RMB634.4 million mainly due to the increase in overall Average Selling Price offset by a slight decrease in sales volume.
China Sunsine says during the quarter, the central government conducted rigorous environmental inspections in Beijing, Tianjin, Hebei and the surrounding areas. This affected the production of a number of rubber chemical producers which failed to meet environmental protection laws.
“Due the short supply of rubber chemicals in China, our ASP increased by 25% to RMB18,541 per ton compared to RMB14,849 per ton in the previous corresponding period,” says China Sunsine, “However group’s production was also slightly affected despite the group being fully compliant with the relevant laws.”
3Q17 sales volume decreased by 7% to 34.908 tons from 36,797tons a year ago. Overall gross profit margin decreased by 1.4 percentage points to 26.8% from 28.2% a year ago, mainly due to the increase in raw material prices which were not fully passed on to our customers during this quarter.
In its outlook, China Sunsine says it is still waiting for the approval from the relevant government authorities for the trial run of the new Phase 1 10,000 ton high-grade TBBS production line. Management hopes to receive the go-ahead by the end of the year.
Meanwhile, construction of the new 10,000-ton IS (insoluble sulfur) production line in Ding Tao facility has been completed and is now undergoing machinery testing. A trial run application will be submitted to the authorities in due course.
Shares in China Sunsine closed 3 cents higher at $1.09 on Monday.